October 21, 2019
Depending on the yardstick being used, Manhattan’s third-quarter office leasing volume was either down or basically flat on a year-over-year basis, while year-to-date volume was either up slightly or down. Asking rents across the island either ticked up to new highs in Q3 or were near historic highs.
These slightly different, but by no means incompatible, takes are offered by Avison Young, Colliers and Transwestern in examining how the nation’s largest office market fared during the three months ended Sept. 30.
Avison’s Q3 report indicates a new high of $82.97 per square foot for asking rents, up 5% Y-O-Y, with Q3 leasing volume of 8.5 million square feet roughly comparable Y-O-Y and YTD volume of 27.4 million square feet, up 2% from the year-ago period.
Colliers measured Q3 leasing volume of 9.54 million square feet, down 16.3% Y-O-Y. However, YTD volume of 29.79 million square feet surpassed the year-ago period, albeit by a slightly smaller percentage than Avison data indicate, while also surpassing the five- and 10-year averages.
The Colliers report also recorded a 5% Y-O-Y increase in asking rents for a new high-water mark, although the average was $79.77 per square foot, a difference of nearly $3 compared to Avison Young’s metric.
Transwestern recorded Q3 leasing volume of 5.7 million square feet and YTD volume of 21.2 million square feet, the latter a Y-O-Y decline of 12% compared to the first three quarters of 2018. Average asking rents ended the quarter at $80.24/square foot, near historic highs.
“Consistent employment gains have translated into office leasing demand that has helped boost both rents and leasing volume across Manhattan,” said Mitti Liebersohn, president and managing director—NYC operations at Avison Young. “Overall, the Manhattan office leasing market remains in a healthy equilibrium.”
At Transwestern, research manager Danny Mangru observed, “Manhattan leasing activity slowed notably in Q3, particularly when compared to the strong figures from last quarter and historical high leasing in 2018.”
He added, though, “the market is still in a very strong position: rent rates are still at near-record highs and we are tracking an active pipeline for Q4 and beyond that looks very full. We firmly anticipate the market closing 2019 on a strong note, right along our historical averages, possibly even higher.”
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